RMC No. 63-2023: Revokes BIR Ruling Nos. 038-2001 and 046-1995

Key points

1. CDC as a GOCC. Although CDC is a private corporation with proprietary activities, it is a Government-Owned and Controlled Corporation entrusted with regulatory functions. It does not stand on equal footing with business enterprises in the Clark Special Economic Zone, so it cannot claim their privileges.
2. Income tax. Unless a law expressly says otherwise, CDC is treated like other GOCCs, and its income is subject to Income Tax under Section 27(C) of the Tax Code.
3. Same result even as a business enterprise. After the CREATE Law, Section 12(c) of RA No. 7227, as amended, was repealed and fiscal incentives are limited to business enterprises registered with Investment Promotion Agencies. An entity is either an IPA or a Registered Business Enterprise, never both, and Section 293(H) of the Tax Code states that CDC is an IPA.
4. Effect. CDC cannot avail of the fiscal and non-fiscal incentives granted exclusively to RBEs. All revenue issuances inconsistent with the Circular are deemed repealed, without prejudice to Section 246 of the Tax Code.

Who is affected

• Clark Development Corporation